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Sallie Mae Private Student Loans at a Glance

Piggy Bank & Student Debt

Updated: Oct 10, 2014

Highlights

  • Sallie Mae offers 8 private student loans.
  • Apply for deferment or forbearance if you cannot afford your payments.
  • Consider a student loan consolidation.
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Learn if Sallie Mae's 8 Private Student Loan Types Are Right For You, Plus How to Ask For Deferment & Forbearance.

SLM Corp., also known as Sallie Mae, was the US’s largest originator of federal student loans until 2010 when the Dept. of Education started originating federal student loans itself. Sallie Mae now services federal student loans on behalf of the Dept. of Education, and originates private student loans. Sallie Mae employs 8,000 people, and manages more than $180 billion in debt for more than 10 million student loan borrowers. The company was originally created in 1972 as a government-sponsored enterprise (GSE) and privatized its operations in 2004. Sallie Mae also originates and services private student loans.

As this was written in late 2011, Sallie Mae offers eight private student loans:

Loan Name Intended Borrower & Purpose Amount Available Fees Rate & Term
Source: Sallie Mae, December 2011.
Smart Option Student Loan Must attend degree-granting eligible school and be enrolled in eligible program.1 Up to 100% of school-certified education costs. None 10 years. LIBOR + 2.00% (2.25% APR) to LIBOR + 9.88% (9.37% APR)1
Career Training Smart Option Student Loan Non-degree-granting institution with a planned term for enrollment of approximately one academic year. Up to 100% of school-certified education costs. Up to 5% 9 years. LIBOR + 7.75% (APR 8.00%) to LIBOR + 12.50% (13.76% APR)
Medical Residency & Relocation Loan Enrolled in final year of study at an allopathic or osteopathic school of medicine and expect to be awarded M.D. or D.O. degree during the same academic year of application. $1,000 up to $15,000 None LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)
Dental Residency & Relocation Loan Expect to be awarded D.D.S. degree during the same academic year of application. $1,000 up to $15,000 None LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)
Global Health Residency & Relocation Loan Enrolled in final year of study at an allopathic or osteopathic school of medicine and expect to be awarded M.D. or D.O. degree during the same academic year of application. $1,000 up to $15,000 None LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)
Bar Study Loan Enrolled in final year at an ABA-accredited law school, or graduated within last 12 months, and sitting for the bar exam no later than 12 months after graduation. $1,000 up to $15,000 0.00% or 5.00% 15 years. LIBOR + 5.00% (5.24% APR) to LIBOR + 13.00% (14.01% APR)
K-12 Family Education Loan Student enrolled of an eligible K-12 school. 100% the cost of a child's education. 0.00% or 3.00% 3 years. LIBOR + 7.00% (7.25% APR) to LIBOR + 11.50% (13.82% APR)
Tutorial Financing Loan Student enrolled at an eligible tutoring and learning center. Variable. 0.00% to 5.00% Variable term. LIBOR + 7.00% (7.25% APR) to LIBOR + 13.50% (APR 15.30%)
1Loans available at a higher rate for non-degree schools.

Sallie Mae and Student Loan Collections

If you cannot afford to repay your Sallie Mae student loan, you have options to avoid default (non-payment). Before reading any further, learn if your loan is federally insured (the US government is guaranteeing repayment of the loan), or private. If your loan is FFEL, Perkins, or Direct, it is federal. If the Sallie Mae loan is federally insured, Sallie Mae must follow federal rules for student loan collections. See the Bills.com resource Default on Federal Student Loan to learn more about your rights, options, and liabilities as the borrower of a federal student loan.

If you cannot afford your Sallie Mae student loan payments and your situation is temporary, login to your Sallie Mae account, select the Postpone Payments section, and request a deferment. Some Sallie Mae loans also allow forbearance. If your income is reduced, Sallie Mae will also negotiate a reduced monthly payment. The Sallie Mae Postponing payments page outlines these options.

If the Sallie Mae loan is private, then Sallie Mae will follow the borrower’s state laws and the rules in the loan contract the borrower signed. Private student loans are similar to unsecured debt. If the borrower defaults on a private student loan, the creditor or collection agency must sue in civil court to collect. If it wins a judgment, the creditor or collection agency can garnish wages, place a lien against property, or a levy financial accounts. The only thing that separates a private student loan from other unsecured debt, such as credit card debt, is that private student loans are not dischargeable in a bankruptcy filing, generally speaking.

Student Loan Consolidation

A student loan consolidation may help by increasing the term length, thereby lowering the monthly payment. There are basically two types of consolidation loans — unsecured and secured. To learn more about unsecured student loan consolidation, see the Bills.com Student Loan Consolidation page.

If you are a homeowner with equity in your home, a debt consolidation loan secured on your home may also be an option, though you should be careful before you borrow money against your home to pay off these Sallie Mae loans. You would be converting what was previously unsecured debt into secured debt. This could cause problems in the future if you are unable to make your mortgage payments. To explore this alternative, you can apply with Bills.com’s network of providers by applying at the Bills.com mortgage refinance form.

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63 Comments

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  • AR
    Sep, 2013
    Armando
    I defaulted on my sallie mae payments back in '06 when i was kicked out of school and started a loooong streak of unemployment. Since then, i believe my loan was sold to a separate collection agency. On my credit report, it states the total i owe to sallie mae is roughly $3k. The collection agency is asking for payments to the full loan ($25k). Does the collection agency have any legal standing to force or sue me in order to collect on a debt that they purchased from the original lender? My last actual payment was made sometime in '06, so it's been about 7 years since any activity with my account. I think Florida's Statute of Limitations is about 4 years, so if I'd be taken to court could I use it as an affirmative defense?
    0 Votes

    • BA
      Sep, 2013
      Bill
      If the Sallie Mae loans are private, and the court applies Florida's Title VIII § 95.11, the statute of limitations period is 5 years. If, as you mentioned, your last payment was in 2006, the clocked ran out sometime in 2011 or very early 2012. You can use the statute of limitations as an affirmative defense.

      Regarding your first question, Sallie Mae has the right to sell its collection accounts to collection agents. Sallie Mae may sell the account for the balance due only. It may not sell the account for the original loan amount.
      0 Votes

  • KM
    Dec, 2011
    Keith
    If you reside in Pennsylvania but earn wages in another state would the garnishment rules fall under the state you earned wages or the state (PA) you live in?
    0 Votes

    • BA
      Dec, 2011
      Bill
      The garnishment would depend on the place where the court judgement was given. If the lawsuit was in Pennsylvania, then PA laws would govern the wage garnishment rules. If the court judgment was done in the place of work, then those laws would apply. The creditor can domesticate the lawsuit to another state. I suggest that you speak with an attorney, as only an attorney can properly dispense legal advice. Also, work with your creditors or seek debt relief, to avoid a wage garnishment.
      0 Votes

  • KM
    Nov, 2011
    Kathy
    I recently filed for Chapter 13 due to my house being underwater and significant credit card debt incurred while in Grad school. I am in an 80/20 loan on my house and I am able to strip the 2nd loan and discharge my credit card debt. I will be left with 250k in school loan debt. I have every intention of continuing with the payments while in the chapter 13 as the interest is ridiculous. I have one large loan that I consolidated into the IBR plan and two private loans. Am i penalized for any payments made to my school loan debt while in the chapter 13? What if I pay off one of the smaller private loans while in the chapter 13, am I penalized for that?
    0 Votes

    • BA
      Nov, 2011
      Bill
      Consult with your bankruptcy lawyer before you start paying-off debts. Debtors may not favor one creditor over others that are in the same class.
      0 Votes

  • CA
    Nov, 2011
    Cathleen
    Thank you for the helpful information and yes if you wouldn't mind I would greatly appreciate a referal to a bankruptsy attorney that you recommend. Thank you!
    0 Votes

    • BA
      Nov, 2011
      Bill
      See the Bills.com resource How to Find A Lawyer for my best advice on finding the right lawyer for your needs.
      0 Votes

  • CA
    Nov, 2011
    Cathleen
    Hi Bill, I am trying to get on the right track but am finding it hard to know where to start. I have run into significant economic difficultly I owe money to everyone it seems. I am debating on filing for bankruptsy, however, I also have student loans that I will need to consolidate and soon. I don't know what I should do first....or at all! I need help! Please point me in the right direction....
    0 Votes

    • BA
      Nov, 2011
      Bill
      See the Bills.com Debt Coach for a no-cost, no-nonsense analysis of your situation. Debt Coach explains the pros and cons of your options, and the costs for each.
      1 Votes

    • JL
      Mar, 2012
      jenna
      I am trying how to find the amount I owe Sallie mae and The total amount I owe for student loans. All the web sites keep referring me to another
      0 Votes

    • BA
      Mar, 2012
      Bill
      There is not a single Web site tallying all student loan information for both private and federal student loans that I am aware of. To learn about your federal loans, login to the Dept. of Education's National Student Loan Data System for Students (NSLDS). To learn more about your private loans, contact your lender(s) or servicer(s).
      0 Votes

    • RK
      Apr, 2012
      rebee
      go to www.annualcreditreport.com you will get 3 ...equifax/transunion & expeiron try to copy them out & u also can dispute any items & there u will see ur payments & balances. i seen mine & this is robbery!! is the state of new jersey broke? I DON'T THINK SO ! not with the interest they are charging us!!! i owe 1500 for the past 3 years its down to 1497 wow nj thank you!! i will do my social work in pa or delaware
      0 Votes